How much is absenteeism costing your business?

How much is absenteeism costing your business?

When it comes to time-off, there’s a balance that must be struck: the need for understanding and the needs of your business. After all, it’s only right you recognise that unfortunate things happen - people get sick, they have family emergencies. It can be inconvenient and messy, but that’s life.

On the other hand, employees serve a purpose. Without them, the day-to-day activities that generate revenue for your business don’t happen. So, if you allow absenteeism (without good reason) to grow, it can be bad for business.

Although it may seem obvious, here are the official definitions of absenteeism so there’s no ambiguity.

Planned Absenteeism: Long-term absences, annual leave and other paid time-off, vacation leave, staff/workforce development leave, government service leave, and routine or other planned medical treatment.

The business costs of absenteeism

Absenteeism is having a negative effect on profitability for small and medium businesses (SMBs) in the UK. The average number of sick days for a UK employee is 4.3 days a year, although 49 percent of small business owners say staff take more than five days off each year. This might not seem like cause for alarm, but with enough employees and enough time, it all adds up.

In the last year, absenteeism cost the UK economy £18 billion. Reports predict that this cost will increase to £21 billion in 2020, and £26 billion in 2030. Right now, studies suggest that each employee costs businesses approximately £500 a year in absentee costs.

Further costs associated with absenteeism are less tangible. It can be hard to attribute a monetary value to them, but they still hamper your profitability nonetheless. Here are some examples:

Low morale. If there’s never enough people to work effectively, that can be a drain on your workforce.

Staff disengagement. When morale is low, employees may be more likely to feel like nothing they do matters. As a result, they may switch off, becoming much less productive.

More employee overtime and workload. Because things are taking more time, overtime and workloads increase. Because of this, the amount of money being paid out to workers also rises.

Management frustration. With increased costs and less output, management can become angry with the situation. This leads to conflict between employees and management, exacerbating the situation further.

Negative customer feedback. All this bad energy and lack of productivity inevitably affects the product or service you sell. After a bad experience, customers won’t come back. They may even tell their friends and family about their negative experience. This affects your business reputation, leading to less sales.

Absenteeism is at the root of every cost listed above. Yet, small businesses don’t seem to take any measures to prevent them. Thankfully, there is technology available to help you keep track of attendance within your business.

See the bigger picture with ACUTEC Attendance

With ACUTEC Attendance, you get a complete view of your workforce and take time management to the next level. Through the use of cloud technology, you can keep track of exactly which staff members are in the building, as well as all holiday, overtime and sick leave.

By maintaining a clear picture of everyone’s schedules, you can prevent the costs of absenteeism. You can see who’s working too hard, who’s sick and who’s on holiday. You can speak directly to these employees to figure out how you can keep them productive and happy at work. This not only saves you money but allows you to avoid the pitfalls mentioned above.

If you’d like to learn more about how Acutec Attendance can make your HR hassle-free, get in touch today.

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